Question

December 2006 Part Level Submen) The r a ce of Sheridan Corporation Preferred (16,000 shares ) Common Stock (259,000 shares und Pada Capital in bass of Par-Preferred Stock Pidin Capital incess of Pare-Common Stock Common Stock Dividends Distributable Red Famings 2,590,000 259.000 410,000 259.000 A review of the accounting records reveals the following No errors have been made in recording 2020 transaction or in preparing the closing entry for net income Preferred Mocks 50 , , and cumulative; 16,000 shares have been using since ay 1, 2018 Authorized Meckis 21,000 shares of preferred, 518,000 shares of common with a $10 par value The January 1 balance in Retained Earnings was $1,120,000 On July 1, 21,600 shares of common stock were issued for cash 18 per share On September 1, the company discovered an understatement error of $87,000 in computing sales and was A cash dividend of $259,000 was declared and properly allocated to preferred and common stod on October 1 On December 31, 10% common stock dividend was declared out of retained earnings on common stock when Netcome for the year was $588.000 10. On December 31, 2020, the directors authored score of a $193,000 restriction of retained earnings for th The offect of eri 2016 d

Answer 1

c
Allocation of the cash dividend to Preferred Stock	96000
Allocation of the cash dividend to Common Stock	163000
Workings:
Annual preferred Dividends	48000	=800000*6%
Preferred Stockholders will be paid dividend for 2 years 2019 and 2020
Allocation of the cash dividend to Preferred Stock	96000	=48000*2
Allocation of the cash dividend to Common Stock	163000	=259000-96000